Jeevan Anand policy…surrender or paid up..??

POSTED BY shivam aarora ON April 17, 2013 3:27 pm COMMENTS (19)


I will like to start with a little description about my situation to help in understanding my query better.

I am 25. Currently working but now going for further studies.
I took Jeevan Anad policy 2 years back. Falling for the beautifull picture painted by the agent i took a relatively big policy with an anual premium of 39K. Policy term is 25 yrs(long term planning) and SA is Rs 10lac.

Now i have paid two premiums only.
1-> 20K ( as half as rebated by my agent)

2- > 40k

Total investment- 60K

My third premium is due in a month and also i am quitting my job to persue studies.So i wil be needing my resources to help me survive during my 2yrs of studies( I am taking almost all my tution fees as an education loan..i.e. aprox 11L)

As far as my knowledge i wont get any surrender value because i have paid only 2 premiums(correct me if i am wrong here)

My query is shal i pay the third premium as it is almost due and then surrender immediately to get some surrender value(also tell me how much it wld be) or shal i surrender now and forget that i ever a had a policy(loosing 60K 🙁 …) or make it paid up after third premium…

Please suggest the best way out to minimize my losses and also considering i wont be earning for next two years and beyond that i have my loans to be repayed.

Also will i be eligble for paying taxes on the 80K amount of two premiums as i had taken tax rebate for these premiums.

Please suggest as i have to take a decision quickly.

19 replies on this article “Jeevan Anand policy…surrender or paid up..??”

  1. swift says:

    Did you get any answer?

  2. dhananjay kulkarni says:

    If stopped this policy on the halfway, after 1st premium what are the better options for Jeevan Anand ? As mutual funds and SIP and Eq investments dont give guarrenty like Jeevan Anand after maturity , am not considering these options. Please suggest risk free income sources for retirement.

    1. Ramesh says:

      Since when has Jeevan Anand started guaranteed return?
      There aren’t any risk free income sources. Consider the Inflation Risk too.

  3. Dear Gautham, if you opt to bnear the loss of 90K & invest the unpaid prem. of 90K elsewhere, you may earn more than what this policy ‘ll give you. the Eq. investments may fetch you 10-12% return over the next 15-18 year period.

    think over it.



  4. Gautham Lakkur says:

    Thanx for the replies..

    Quiet confused and shocked to bear the loss of 90k, the premium paid till date on this stupid policy, my hard earned money used for no purpose 🙁

    Following analysis is my proposal to minimize the loss to possible extent.

    As this policy is now 18 months old, if i continue for next 18 months by paying additional 90,000/- the policy can be made paid-up, with a SA of 1,80,000/- as said in the calculator.

    Assuming a bonus rate of 47/- per thousand, bonus accrued for 3 years will be 1,69,200/-

    So during the year 2031 i’ll be getting SA+Bonus = 3,49,200/- No additional bonus i believe..

    If i discontinue this policy now my loss will be 90,000/-. and investing the next 18 months premium of 90,000/- in debt instruments would yield about the same @ 2031. But in this policy i’m getting the advantage of insurance (of 1.8L) upto 2031, if i consider this policy as debt instrument in my portfolio, is it not advisable to pay the remaining 90,000/- and make it paid-up over next 18 months? Pl help me minimize the loss..


  5. Suhas says:

    Is it true that by simply stop paying the premium will make the policy paid up? is there any other procedure which is req to make it paid up?

    1. Yes stopping premiums is enough. Of course the policy must be old enough to be eligible for a paid-up value (usually 3 premiums should have been paid)

  6. Dear Gautam, please check the calculator provided by dear Pattu & decide on your own.



  7. shivam aarora says:

    @free financial calculators : thanks for all the explanations…i will probably convert it to paid up.

    And regarding the agent he offered me a 50% discount on my first premium. I didnt ask him for this and so took it up happily as there were no plans to surrender. Neways thanks again. 🙂

    1. Gautham Lakkur says:

      Hi Shivam,

      I also fell into the pit and took this stupid policy. Mine is 18months old with an annual premium of 60k, i’m planning to make it paid-up as i don’t want to loose any money. Some questions pertaining to paid-up..

      Can you tell me what will be the paid-up value of your policy, as in the way it is calculated ??
      What will happen to the bonus accumulated till date and do we get the bonus for the paid-up value for the rest of the maturity term?
      Do we get all the benefits as mentioned in the policy till the date of maturity from the date the policy is made paid-up?


      1. Use this to calculate the paid-up and surrender values. For accurate bonus info see the link from Basunivesh I sent above

        Bonus will not be given for rest of the period once you make it paid-up
        No other benefits are applicable once you make it paid-up.

        You will need to wait 3 yrs to be eligible for paidup. The ‘loss’ is more if you pay more premium for a bad product.

        You will anyway not get the first year premium (now or after 3 yrs). Best to stop now and invest rest of the amt elsewhere.

  8. Dear Shivam, please contact LIC to know the paid up value after paying 3 prem. & check where you are comfortable?



  9. shivam aarora says:

    thanks Ashal…
    just one more scenario…if i pay 40K as third premium…

    1->what about bonus amount, if any, i will get on surrendering(other 23400 you mentioned above)..?
    2->secondly if i make it paid up…what total amount would i get..?Considering i have already lost 60k and i invest 40k now…what amount will it be after 23 years…is it worth investing…?

  10. Wonder if the agent will bug you/your family to repay his share of 1st premium as he will no longer get commissions. He would have made his own long term planning: regular income through you for 20 years!

    1. shivam aarora says:

      yes..i am also not sure about that…
      suddenly this jeevan anand feels like such a big mistake(may be i kept the premium too high)

      Also if by chance there is an option to reduce the premium amount and continue the same policy…i can think over it if thats possible…Please suggest some way…

      1. Use this to calculate the paid-up value or surrender value after getting bonus information

        Dont worry about lowering premium. Not worth it.

        1. shivam aarora says:


          After paying 3 premiums it is showing me 230000 as the final paid up amount considering 50% as bonus rate. I am not sure what bonus rate is applicable to me. LIC customer care is busy and LIC website is howing vested bonus of 47000.Please clarify what bonus rate is applicable on my policy and also if i get 2.3L after 23 yrs shal i pay 40K more..?

          what about my agent bugging me…do i owe him that 20K or is it a normal scenario…

          1. Get the rates from here


            If you are uncomfortable about loosing money pay one more premium and make the policy paid up.

            Technically what you did is wrong, asking the agent to pay half commission. Whether he will come ask you or not is something no one can predict. He might. If he does you should probably refund the amt to him.

  11. Dear Shivam, even after paying this 3rd prem. the money ‘ll not come to you immediately. you w’d have to wait for 1 more year. Now the most important part, how much you ‘ll get as surrender amount? 30% of the 2nd & 3rd prem. amount i.e. 39+39 => 78000*30% => 23400 Rs.

    So the best option is you to forget the 60K already paid by you & move on.



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